Core Viewpoint - U.S. markets are facing uncertainty due to a hawkish stance from the Federal Reserve and political developments, leading investors to adopt a cautious approach. A relative price strength strategy is suggested as a resilient method for identifying investment opportunities while minimizing risks in volatile markets [1]. Group 1: Relative Price Strength Strategy - The relative price strength strategy focuses on stocks that outperform their peers, which is crucial for identifying potential winning investments [3][4]. - Stocks that show impressive earnings growth or valuation multiples but underperform compared to broader groups may indicate underlying issues [3]. - It is essential to assess whether an investment has upside potential, particularly for stocks that have outperformed the S&P 500 over the past 1 to 3 months and possess solid fundamentals [5]. Group 2: Screening Parameters - Screening parameters include relative price changes over 12 weeks, 4 weeks, and 1 week, ensuring stocks have consistently outperformed the S&P 500 [7]. - Positive estimate revisions for the current quarter's earnings are also considered, as upward revisions typically lead to additional price gains [6]. - Stocks must have a Zacks Rank of 1 (Strong Buy), a current price of at least 424.5 million. The 2024 earnings estimate indicates 112.1% growth, and shares have increased by 157.4% over the past year [11][12]. - Synchrony Financial (SYF): A leading consumer financial services company with a market cap of 4.5 billion. The 2024 earnings estimate indicates 829.8% growth, and shares have gained 135% in a year [14]. - Allient Inc. (ALNT): Designs and manufactures precision motion control systems with a market cap of $408.3 million. The 2024 earnings estimate has increased by 10.9%, but shares have lost 8.7% in the past year [15][16]. - Rush Street Interactive (RSI): Develops online gaming platforms with a 2024 earnings estimate indicating 235.7% growth. Shares have surged by 137.8% in the last year [17][18].
5 Relative Price Strength Options Available for Investors